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Q&A: We aspire to building a "second home" in China: SAP

Zafar Anjum | Sept. 9, 2013
We aspire to building a "second home" in China, contributing to China's sustainable growth and the realisation of the "China Dream", says Stephen Watts, President of SAP Asia Pacific Japan.

Innovation and co-innovation

In a world that requires continuous innovation-and without disruption-SAP has established a culture of co-innovation. Through our open ecosystem, we offer co-innovation from SAP and partners.

  • SAP's global research network consists of 19 research locations worldwide with 14 SAP Labs in 12 countries, including two in China (Shanghai and Chengdu) and two in India (Bangalore and Gurgaon)
  • IT services provider NTT Data announced in August an SAP solutions lab in Hyderabad, India, to build solutions using next-generation technologies including analytics, user experience and mobility

Ecosystem

We continue to invest in our partner ecosystem to drive development and delivery of innovative software solutions that address the specific market demand in APJ.

  • The Partner Adoption Center (PAC) in China in association with SAP Co-innovation Labs provides partners end-to-end support for growing their business and delivering co-innovated solutions
  • By 2015, we plan to attract one million developers to our platforms. With revenue from partners already at almost 40 percent, APJ is the region that is most advanced in achieving this target
  • We continue to invest in our broad partner ecosystem to drive development and delivery of innovative software solutions that address industry-specific and local market needs.

Weaknesses

  • Like our competitors and partners, we saw macro challenges in Asia last quarter. China, Australia and Japan were slower than expected but we had strong double digit growth in several markets including India and Southeast Asia. And as said, the world is moving to the cloud rapidly. This quarter marked a turning point for SAP in our ambition to lead in the cloud. SAP's cloud is growing +171 percent year over year, faster than Salesforce, NetSuite and Oracle. And despite the current challenge, we believe there are strong growth opportunities in Asia. In China, our pipeline is strong and long-term, we expect a return to solid growth as we continue to leverage our $2 billion investment in this strategic market. We are also encouraged by strong growth rates in India of over 60 percent and Southeast Asia of around 15 percent. By 2015, China is expected be one of SAP's top five markets.

What are SAP's growth markets in the region? Are you bullish about any particular country or vertical?

SAP is accelerating investments in the key growth markets, including India, Korea, Southeast Asia and China. China has been SAP's largest investment area in the last few years. We announced in 2011 that we would invest 2 billion dollars into China by 2015 and pledged to double our workforce there. We are well on our way and continue to scale and invest.

We aspire to building a "second home" in China, contributing to China's sustainable growth and the realisation of the "China Dream". We're in the process of achieving the capability to offer our Public Cloud solutions to Chinese customers. In addition, tier 2 and 3 cities in China provide great business opportunities for SAP in China. We have sent engineers to cities like Chengdu to develop cloud and other technologies. Business in China is moving from the coastal regions to the mid-west and SAP is actively following this trend. And we have R&D teams in Xi'an as well as Beijing, Nanjing and Dalian.

 

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